Investors are turning more selective on emerging-market corporate bonds, betting that only a few will continue to provide strong returns and insulation from monetary policy turmoil in what’s expected to be a volatile second half of the year.
Money managers from Aegon Asset Management to Lazard Asset Management and T. Rowe Price are among those touting high-yield, dollar-denominated bonds from emerging-market firms. Shorter durations and credit quality that often surpasses that of their host nations help make the trade attractive, they say, even as the murkiness around the Federal Reserve’s timing to lower interest rates — not to mention the US presidential election — puts a lid on a widespread rally in risk assets.
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